Switching from For-Profit to Nonprofit

A leadership deficit is prompting nonprofits to look outside their ranks for managers, says Bridgespan Group Chairman Thomas Tierney

Imagine quitting your job to move to an organization that has fewer resources, affords you less control over the product, and offers a lower salary. Sound enticing? How about throwing into the mix more personal satisfaction, a charitable mission, and a greater sense of community? Indeed, it all adds up to a winning proposition for the many workers in the for-profit sector who are making the transition to the nonprofit world.

Thomas Tierney, chairman and co-founder of the Bridgespan Group, a management solutions firm for nonprofits, says nonprofits are likely to look beyond their own ranks and to use external recruiting methods because of an anticipated leadership deficit. "They need more leadership because of growth but they lack the internal supply that corporations have," says Tierney. "You're not going to close that gap by recruiting from within—not exclusively. A substantial portion has to come from outside."

While the boundaries between the for-profit and nonprofit worlds are blurring, thanks to the rise of corporate social responsibility programs in the former and a growing appreciation for business knowledge in the latter, making the switch between one world and the other can still be difficult. The often-lengthy process can be more arduous than a traditional job search, requiring patience, the willingness to cast aside ego, and the ability to adjust to doing more with less, say those who have made the transition or helped others to do so.

Moving to a World of Consensus

Clay Parcells, marketing vice-president for the career transitions firm Right Management, advises for-profit workers who are interested in nonprofit work to check out the environment before landing a job.

"Understanding the culture—how decisions are made, how people address each other, whether it's a hierarchical organization in terms of titles, then correlating that knowledge with the culture they're coming from—is very important," says Parcells. "In some businesses people are encouraged to make decisions on the fly: whatever's best for the customer, get it done. In the nonprofit world things often have to be approved by a boss or a board, and that's a very different process.

"You have to be especially sensitive [to the new environment] when you integrate," says Debra Oppenheim, co-founder of http://www.phillipsoppenheim.com/, an executive search firm for nonprofits. "You can't come in and decide that anything you bring from the corporate sector is better than anything that was already there."

Oppenheim estimates that 25% of people who make the transition from the for-profit to nonprofit sectors end up leaving their new jobs soon after. "You can't come in and decide that anything you bring from the corporate sector is better than anything that was already there."

Did Volunteer Work First

Joyce Roche, who worked in the corporate world for more than 20 years before becoming president and chief executive officer of the national education and advocacy program Girls Inc. in 2000, says her pro bono marketing work for the Savannah Music Festival, doing volunteer advertising work at her church, and having a board membership at the American Diabetes Assn. made her transition between the two worlds easier, although it still faced some obstacles.

"The real pleasant surprise is running a nonprofit organization is that it is a complex entity," says Roche. "I would say to almost anybody, 'Don't think [a nonprofit] job is easy.' It's probably one of the most difficult jobs I've ever had."

Roche, who was the vice-president of global marketing for the Avon Products (AVP) and then president and chief operating officer of the personal care products maker Carson Products before switching to nonprofit work, says the most interesting aspect of her transition was adjusting to the challenges of bringing financial contributors on board and accepting that when funding requests were denied, it didn't mean she had failed at marketing the institution.

Like Roche, Jarrett Barrios, who focused on health-care issues as a state senator in Massachusetts before becoming president of the state's Blue Cross/Blue Shield Foundation in July, was challenged by the nonprofit world's more limited financial resources. In the nonprofit sector, Barrios says, he is now more accountable for his spending than he while serving in state government. "You live and die by your ability to budget well," says Barrios, whose position has also reduced his authority but afforded him more time with his teenage children.

Looming Leadership Shortage

While switching to the nonprofit sector may be challenging, the Bridgespan Group, which recently started a multimedia portal offering tools that facilitate the transition, says it will become increasingly necessary over the next decade. Bridgespan predicts that 640,000 new leaders will be needed in the nonprofit sector by 2016, due to the retirement of the baby boomer generation, the growth of the sector and its consequent need for greater financial expertise, and a lack of internal training programs to groom future leaders.

"Making the switch to the nonprofit world is more than changing your job; it's changing your entire life," says Josh Ruxin, a Yale University Truman Scholar: "You're more likely to bring your work home when it's lives on the line rather than money on the line."

Ruxin founded the nonprofit Access Project in Rwanda in 2002. "Most of my focus is on providing private-sector management solutions in counseling, coordination, and strategy to improve health care for some of the poorest people on the planet," says Ruxin. The former management consultant says the skills he learned at the Monitor Group, a management consulting firm in Cambridge, Mass., have been invaluable in helping him to think creatively about how to reduce poverty and increase prosperity.

Kathleen Yazbak, managing director of national relationships for Bridgestar, a division of Bridgespan, says those likely to excel in the nonprofit sector have experience in an entrepreneurial or innovative environment, have played a broad role at their prior organization, have a flexible rather than a linear career path, and are able to take a multidisciplinary approach to team projects.

Oppenheim acknowledges that cross-pollination is happening. "Nonprofits are nonprofits and corporations are corporations [but] there is a greater degree of synergy between the two than I've ever seen before," she says. Ruxin, for one, welcomes the trend. "There definitely is a transition under way," he says about the nonprofit sector's gradual adoption of some corporate practices and for-profit recruits, which he calls a new and promising development. "It's the best thing that could happen to nonprofits."

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